Tax Exemption

Tax Exemption

Nonprofit Organizations may obtain exemption from income tax on both a federal and state level. For public charities and private foundations, this exemption can be obtained through Internal Revenue Code 501(c)(3). 501(c)(3) organizations are tax exempt and donations made to them are tax deductible. In order to obtain this tax exemption from the IRS, the organization must complete a 1023 application. This application is extremely detailed and requires the nonprofit to submit detailed financial information including a 3 year proposed budget and a detailed description of the nonprofit’s activities and programs. SLG will prepare the 1023 application in order to obtain tax exempt status for your nonprofit organization.

Other types of nonprofit organizations may seek exemption under 501(c)(4), 501(c)5 or 501(c)(6) as a social purpose organization, social club or trade association. Semanchik Law Group will assist your organization with figuring out which type of exemption your organization will qualify for and the best way to seek that exemption.

For nonprofits located in California, it is essential that you seek tax exemption on a state level with the Franchise Tax Board. Many organizations fail to seek exemption and find themselves owing the $800 minimum franchise tax. Semanchik Law Group will ensure your organization is exempt on both a state and federal level.

For organizations that lose their tax exempt status or have it revoked by the IRS or Franchise Tax Board, Semanchik Law Group will assist with obtaining compliance so that your organization can continue to operate.

Once tax exemption is achieved, Semanchik Law Group will assist with nonprofit governance to ensure your nonprofit stays compliant. Let SLG worry about the legal details so you can focus on serving your charitable mission!